‘DID RBI INFORM GOVERNMENT OF IMPACT ON CIRCULATION?’

NEW DELHI: The Supreme Court on Friday asked the central government if the Reserve Bank of India (RBI) had informed it that demonetisation will result in the withdrawal of over 86% currency in circulation.

Making a query to the Centre as part of its consideration of a bunch of petitions challenging the November 8, 2016 notification, a five-judge Constitution bench said, “Did the RBI inform Government that 86.4% currency would be withdrawn from circulation? This was an enormous action.”

Under the RBI Act Section 26(2), a recommendation by the RBI’S Central Board precedes any decision to demonetise any series of currency notes.